Penalty Abatement
The IRS has the authority to impose various penalties on taxpayers who fail to file or pay their taxes correctly. These penalties can accumulate rapidly, reaching hundreds or even thousands of dollars, which can make it challenging for taxpayers to settle their debts.
Types of IRS penalties
The IRS can impose penalties on taxpayers in a variety of situations, including:
- Failure to file
- Failure to pay
- Incorrect tax returns
- Failure to deposit employment taxes
- Underpayment of estimated taxes
- Returned (dishonored) checks
Penalty abatement
The IRS enforces these penalties to ensure the tax system remains fair and effective. Without consequences for not paying taxes properly, individuals could easily avoid fulfilling their obligations. However, the IRS recognizes that many taxpayers who fail to file or pay their taxes do so unintentionally and offers ways to reduce or eliminate penalties.
For example, first-time offenders may be eligible to have their penalties waived. Additionally, you can apply for penalty relief if you faced reasonable circumstances, such as a family death or serious illness, that made it difficult or impossible to pay or file your taxes.